The current U.S. administration is committed to reducing car and truck fuel consumption and emissions. It has already managed to make major manufacturers agree on its 54.5 mpg Corporate Average Fuel Economy (CAFE) 2025 target.
Yet President Barack Obama wants more American new car and truck buyers to opt for cleaner vehicles. Therefore, during his speech at the Daimler Trucks North America plant in North Carolina, he proposed increasing tax incentives for buyers of electric, natural gas and hydrogen-powered vehicles.
“We’ve got to continually develop new sources of energy”, said Obama. “We’re not going to be able to just drill our way out”, he added referring to the rising fuel prices which averaged US$3.76 on March 6, up from US$3.51 a year ago according to data provided by the American Automobile Association.
The President wants Congress to implement two changes to tax law. The first would be to raise the tax credit for purchasing a “green” vehicle from today’s US$7,500 to US$10,000, with the credit applied directly at the dealership.
He also proposed that buyers of electric and natural gas-powered commercial trucks, including semi-tractor trailers, qualify for a 50 percent tax credit for half of their “clean” vehicles’ cost over its conventional version, reducing their retail prices.
The final part of his plan, which would also have to be approved by the Congress, includes a US$1 billion investment in up to 15 cities for creating the necessary infrastructure, such as charging stations in order to make electric and plug-in vehicles more attractive.
This being an election year, Republican Senate Leader Mitch McConnell said that the President “can’t claim to have a comprehensive energy policy”.
“The American people don’t think it’s particularly fair that at a time when they’re struggling to fill up the tank, their own tax dollars are being used to subsidize failing solar companies of the President’s choosing”, he added.
Story References: Bloomberg News
